Welsh Property Trust Inc. withdrew its initial public stock offering Thursday, citing lousy market conditions. The move comes just two days after Welsh altered its original offering for the second time, cutting the expected price range on the shares to $8.50 to $10.50.
The real estate investment trust (REIT), formed by Welsh Cos. in Minnetonka, announced IPO plans in March, saying it planned to raised up to $345 million. Shares were originally priced at $19 to $21.
Welsh CEO Dennis Doyle said in a statement that the withdrawal was in the best interest of existing investors.
Welsh spokeswoman Michelle Surkamp said the turmoil in the markets made it difficult for potential buyers, many of whom would have been forced to sell current investments to free up money for new ones.
"There's no price that would have made it a good deal for them if they had to sell current stocks that they own," she said.
Welsh is the latest in a string of companies to either withdraw or postpone public offerings. According to Thomson Reuters, more companies have canceled or postponed than have actually gone public this year.
David Weild, founder of Capital Markets Advisory Partners and former vice chairman of the Nasdaq Stock Market, said that the REIT sector has been beset with challenges. The European credit crisis and uncertainty over the U.S. recovery is unsettling investors, he said. REITs also face challenges because so much distressed commercial real estate has come into the market and there's been a wave of REIT deals focused on distressed investments, especially mortgages, he said.
"The market to buy new REITs is looking fatigued," Weild said.
